Correlation Between Olema Pharmaceuticals and Bicycle Therapeutics
Can any of the company-specific risk be diversified away by investing in both Olema Pharmaceuticals and Bicycle Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Olema Pharmaceuticals and Bicycle Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olema Pharmaceuticals and Bicycle Therapeutics, you can compare the effects of market volatilities on Olema Pharmaceuticals and Bicycle Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Olema Pharmaceuticals with a short position of Bicycle Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olema Pharmaceuticals and Bicycle Therapeutics.
Diversification Opportunities for Olema Pharmaceuticals and Bicycle Therapeutics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Olema and Bicycle is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Olema Pharmaceuticals and Bicycle Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bicycle Therapeutics and Olema Pharmaceuticals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Olema Pharmaceuticals are associated (or correlated) with Bicycle Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bicycle Therapeutics has no effect on the direction of Olema Pharmaceuticals i.e., Olema Pharmaceuticals and Bicycle Therapeutics go up and down completely randomly.
Pair Corralation between Olema Pharmaceuticals and Bicycle Therapeutics
Given the investment horizon of 90 days Olema Pharmaceuticals is expected to generate 2.24 times more return on investment than Bicycle Therapeutics. However, Olema Pharmaceuticals is 2.24 times more volatile than Bicycle Therapeutics. It trades about -0.1 of its potential returns per unit of risk. Bicycle Therapeutics is currently generating about -0.31 per unit of risk. If you would invest 1,186 in Olema Pharmaceuticals on August 30, 2024 and sell it today you would lose (174.00) from holding Olema Pharmaceuticals or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olema Pharmaceuticals vs. Bicycle Therapeutics
Performance |
| Timeline |
| Olema Pharmaceuticals |
| Bicycle Therapeutics |
Olema Pharmaceuticals and Bicycle Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olema Pharmaceuticals and Bicycle Therapeutics
The main advantage of trading using opposite Olema Pharmaceuticals and Bicycle Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olema Pharmaceuticals position performs unexpectedly, Bicycle Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bicycle Therapeutics will offset losses from the drop in Bicycle Therapeutics' long position.| Olema Pharmaceuticals vs. Sana Biotechnology | Olema Pharmaceuticals vs. Cullinan Oncology LLC | Olema Pharmaceuticals vs. Zentalis Pharmaceuticals Llc | Olema Pharmaceuticals vs. Molecular Partners AG |
| Bicycle Therapeutics vs. Ikena Oncology | Bicycle Therapeutics vs. Eliem Therapeutics | Bicycle Therapeutics vs. HCW Biologics | Bicycle Therapeutics vs. RenovoRx |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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